As I already siad in this thread, I'm still trying to let Apples estimates for Q1 sink in. That's what is still blowing my mind and I read it almost an hour ago.

Q1 is always the strongest of the year, so this needs to be compared YoY not sequentially. I haven't got a handle on those numbers myself. If you find them please post. If they really have guided confidently for next quarter it could mitigate some of the sour taste left over from this one.

People should remember that the stock price's value takes into account all available information at the time. Leading up to the estimates, the stock was higher because people valued it that highly on certain assumptions regarding the coming earnings announcements. After the hard numbers come in, the stock price is revalued by the collective market based on the new information.

So its a disappointment in regards to expected performance compared to actual performance.

This isn't always connected to real world results. From a business standpoint, Apple is continuing to do insanely well, weathering the economy and continuing to grow at a break neck rate. So from a business/strategic outlook, Apple is not disappointing, nor is this signaling a downward spiral.

Put simply, Apple did incredibly well, just not as incredibly well as shareholders predicted.

In a way it makes sense; every quarter, analysts are continually conservative, and Apple blows them away. Continuing to shatter expectations is not sustainable; eventually, expectations will be adapted. This time, the pendulum swung top far, but it is approaching more of an equilibrium.

Q1 is always the strongest of the year, so this needs to be compared YoY not sequentially. I haven't got a handle on those numbers myself. If you find them please post. If they really have guided confidently for next quarter it could mitigate some of the sour taste left over from this one.

I already did earlier, they projected a revenue of $37 Billion and EPS of more than $9 per share!

Apple seemed to be immune from the slow global growth over the past three years, always exceeding expectations (often by a lot).

That's a weird spin on global growth: Wall Street expectations based on whisper numbers based on a company's high double-digit increases in revenue and profits (which could come from a combination of market growth, market share growth, and cost-cutting) somehow provides a clue as to the impact on the bottom line from an economy that is growing in the low single-digits!?

A real stretch, I'd say.

Tim Cook is gay, believes in climate change, and cares deeply about racial equality. Deal with it (and please spare us if you can't).

Okay, well that's still a conservative projection, amounting to less than the 54% growth we saw in this YoY quarter.

Quote:

Originally Posted by anantksundaram

That's a weird spin on global growth: Wall Street expectations based on whisper numbers based on a company's high double-digit increases in revenue and profits (which could come from a combination of market growth, market share growth, and cost-cutting) somehow provides a clue as to the impact on the bottom line from an economy that is growing in the low single-digits!?

A real stretch, I'd say.

Spin or stretch? Make up your mind.

Seriously, if a company can grow their earnings by 50% or more in a year when the economy is growing maybe 5% then they've accomplished something major. Which, Apple certainly has -- for several years running. What that's got to do with whisper numbers or anything else you mentioned, I can't really tell.

The real story: Apple is now a $100+ billion / year revenue company and its profits for the fiscal year that just ended ($26 billion) are in the top 20 of all time record annual profits by a company in the history of mankind. Apple is now in the realm of oil companies when it comes to profitability. They've left the tech industry far, far behind.

Yes, it's very impressive, but this was all fully anticipated months ago.

Tim Cook is gay, believes in climate change, and cares deeply about racial equality. Deal with it (and please spare us if you can't).

I chose to listen to the earnings call, rather than follow the threads...

I was generally satisfied with the way they presented the results and the reasons for not meeting some expectations.

What really impressed me, though, was the way Tim Cook handled the barrage of questions directed at him.

In prior calls, Tim would field some of the questions, but most were handled by Peter Oppenheimer or Steve when he was present.

Tim got some pretty innocent sounding, difficult questions -- and was able to respond with very concise detailed answers. He appears to have an encyclopedic mind with total recall -- no fumbling around, Err... Ahh... nothing like that.

Tim had the answer he was able to reply immediately.

On the few occasions where strategy questions were asked -- Tim adroitly parried them.

It was an amazing performance -- but it was not an act.

Apple, its shareholders and customers are in good hands.

"Swift generally gets you to the right way much quicker." - auxio -

"The perfect [birth]day -- A little playtime, a good poop, and a long nap." - Tomato Greeting Cards -

Seriously, if a company can grow their earnings by 50% or more in a year when the economy is growing maybe 5% then they've accomplished something major. Which, Apple certainly has -- for several years running. What that's got to do with whisper numbers or anything else you mentioned, I can't really tell.

You should be able to tell: after all, you're the one that wrote: "....immune from the slow global growth over the past three years, always exceeding expectations."

Whose 'expectations' of exactly what were you referring to? What you wrote tells me that you're the one that conflated global growth and expectations.

'Spin or stretch?' One is a subset of the other. Take your pick.

Tim Cook is gay, believes in climate change, and cares deeply about racial equality. Deal with it (and please spare us if you can't).

You're long (long-dated) call options, not the stock, and yet you think "it's a little different" in terms of the return on your position when the underlying asset price drops!?

Is it 'better' different or 'worse' different?

Its a little different in the context that was being used. He was stating that the stock price dips after earnings because people like me are selling. I said (essentially) that I own long calls, my selling them is different and does not directly affect the underlying equity price drop.

Of course my position sank by an order of manitude more than the stock did tonight, however I really didn't buy them to sell after Q4. I thought it was a possibility that I would sell them before or after, but the big fish was always next quarter's results.

You should be able to tell: after all, you're the one that wrote: "....immune from the slow global growth over the past three years, always exceeding expectations."

Whose 'expectations' of exactly what were you referring to? What you wrote tells me that you're the one that conflated global growth and expectations.

'Spin or stretch?' One is a subset of the other. Take your pick.

So? I'm really not following this line of argument.

Apple has managed to plow through some powerful economic headwinds for several years running. Can they continue to do so? Is this earnings report a sign that they can't? That's the question I am asking. I don't pretend to know the answer.

Yes, it's very impressive, but this was all fully anticipated months ago.

It's mind-blowing to me. Apple combines revenue greater than IBM with profits greater than Microsoft and yet the tech media talks about it like it's a fragile start-up that could screw up at any minute. People need to recalibrate.

Apple has managed to plow through some powerful economic headwinds for several years running. Can they continue to do so? Is this earnings report a sign that they can't? That's the question I am asking. I don't pretend to know the answer.

You tell me: you're the one that confidently, unambiguously, in no-uncertain-terms, stated: "Ouch. The crappy global economy has finally reached Apple."

Now you say you really didn't know that ("I don't pretend to know the answer").

You're not following this.......?

Tim Cook is gay, believes in climate change, and cares deeply about racial equality. Deal with it (and please spare us if you can't).

It's mind-blowing to me. Apple combines revenue greater than IBM with profits greater than Microsoft and yet the tech media talks about it like it's a fragile start-up that could screw up at any minute. People need to recalibrate.

Do they? I haven't heard talk like that about Apple from the tech media since circa 2003.

All companies can come up short, even the great ones. You've never any better than your last act.

It's mind-blowing to me. Apple combines revenue greater than IBM with profits greater than Microsoft and yet the tech media talks about it like it's a fragile start-up that could screw up at any minute. People need to recalibrate.

I think people have!

Tim Cook is gay, believes in climate change, and cares deeply about racial equality. Deal with it (and please spare us if you can't).

Do they? I haven't heard talk like that about Apple from the tech media since circa 2003.

All companies can come up short, even the great ones. You've never any better than your last act.

Have you been living a cave? The standard story is "can Apple survive new product x?" where x is the latest Android phone or tablet or the TouchPad or any of the other failed tablets, and it hasn't changed. Google is a gnat compared to Apple and gets the "unstoppable behemoth" treatment while Apple is still treated like it could implode at any minute if they make one wrong decision.

The real story: Apple is now a $100+ billion / year revenue company and its profits for the fiscal year that just ended ($26 billion) are in the top 20 of all time record annual profits by a company in the history of mankind. Apple is now in the realm of oil companies when it comes to profitability. They've left the tech industry far, far behind.

Have you been living a cave? The standard story is "can Apple survive new product x?" where x is the latest Android phone or tablet or the TouchPad or any of the other failed tablets, and it hasn't changed. Google is a gnat compared to Apple and gets the "unstoppable behemoth" treatment while Apple is still treated like it could implode at any minute if they make one wrong decision.

The one thing that makes me uncomfortable is the fact that 45% of their profitability is tied to one line of products, iPhone. That tight product mix enhances profitability, but demonstrates a high reliance on basically one product... it is risky.

The one thing that makes me uncomfortable is the fact that 45% of their profitability is tied to one line of products, iPhone. That tight product mix enhances profitability, but demonstrates a high reliance on basically one product... it is risky.

This is a very good point. Especially given the fact that, arguably, this is the most competitive segment in which Apple operates (Macs, iPads, iPods, and OS are really pretty much segments of their own).

Tim Cook is gay, believes in climate change, and cares deeply about racial equality. Deal with it (and please spare us if you can't).

Pushing the iPhone 4S from June/July to October. It killed sales, especially when many reports of a new form factor was posted on every news site at least once a month. Maybe it wasn't ready. But, the conference call made it sound like they waited for the new carriers for the launch.

Then we have the analysts. Yes, Apple always under-promises. Analysts for the most part usually low ball their numbers too. Then we have the amateurs handing the pros their a@@ for the last year or so. So, the pros have to get aggressive with their numbers, so they don't look stupid. Record iPad sales, record iPhone sales, record Mac sales, unfortunately, iPhone sales are a huge chunk of revenue, missing forecasts by just a little throws everything out of whack.

If Apple beat the yoy quarter by 475% and estimates had it at 500%, there would be disappointment. The market is irrational. Trying to understand it is an exercise in futility.

Winston Smith sat at his desk in the Records Department of the Ministry of Truth.
A rolled newspaper article appeared in the slot by his desk. He removed the paper from the hole and carefully unwrapped the article and gazed at the headline and accompaining text.

Pushing the iPhone 4S from June/July to October. It killed sales, especially when many reports of a new form factor was posted on every news site at least once a month. Maybe it wasn't ready. But, the conference call made it sound like they waited for the new carriers for the launch.

Then we have the analysts. Yes, Apple always under-promises. Analysts for the most part usually low ball their numbers too. Then we have the amateurs handing the pros their a@@ for the last year or so. So, the pros have to get aggressive with their numbers, so they don't look stupid. Record iPad sales, record iPhone sales, record Mac sales, unfortunately, iPhone sales are a huge chunk of revenue, missing forecasts by just a little throws everything out of whack.

If Apple beat the yoy quarter by 475% and estimates had it at 500%, there would be disappointment. The market is irrational. Trying to understand it is an exercise in futility.

Next time expectations will be lower, I presume, which will help reset expectations which will lead up to another blowout quarter.

Have you been living a cave? The standard story is "can Apple survive new product x?" where x is the latest Android phone or tablet or the TouchPad or any of the other failed tablets, and it hasn't changed. Google is a gnat compared to Apple and gets the "unstoppable behemoth" treatment while Apple is still treated like it could implode at any minute if they make one wrong decision.

I really do live in cave. How did you guess? Fortunately I have electric lights and wifi.

I remember when what you say was true. I'm guessing you wouldn't claim it still is if you had those memories yourself. I hate to break it to you, but it might just be possible for other companies to compete with Apple.

Pushing the iPhone 4S from June/July to October. It killed sales, especially when many reports of a new form factor was posted on every news site at least once a month. Maybe it wasn't ready. But, the conference call made it sound like they waited for the new carriers for the launch.

Then we have the analysts. Yes, Apple always under-promises. Analysts for the most part usually low ball their numbers too. Then we have the amateurs handing the pros their a@@ for the last year or so. So, the pros have to get aggressive with their numbers, so they don't look stupid. Record iPad sales, record iPhone sales, record Mac sales, unfortunately, iPhone sales are a huge chunk of revenue, missing forecasts by just a little throws everything out of whack.

If Apple beat the yoy quarter by 475% and estimates had it at 500%, there would be disappointment. The market is irrational. Trying to understand it is an exercise in futility.

You are leaving out of your critique that the amateur analysts have been much closer to the mark in the past. They are the ones who overshot this time.

Your final statement is so obviously untrue I have to wonder why you have made it. Last quarter Apple beat the street by over 20% and the markets threw a party. That's how it works.

Yes, they are precisely that. If you can't even beat the conservative street consensus for earnings, then that is spelled B-A-D, and it doesn't matter if the company is Apple or GE or Intel or anybody else.

The street consensus you are so reliant upon is simply there for market manipulation. Real investors will look at these numbers and realize that Apple is the only technology company actually increasing sales. Name us one other computer company doing this well?

You're missing one point. Apple's guidance was $25 M in revenues and $5 EPS. They told the Street that it would be a slow quarter. So they actually beat their revenue guidance by 10% and EPS by 40%. It's not their fault that analysts are idiots.

Furthermore, with Apple's track record, it's ridiculous to panic over one quarter - especially when Apple said it would be slow and had reasons for it. At that point, you're no longer an analyst or investor, you're a day trader.

Anybody look to analyst for investment advice shouldn't be allowed to buy stocks in the first place. Talk about being gullible in the presence of con men.

You can't read too much in to one quarter's results, it's not a long enough time to even out the effect of special events. Maybe there were more Mac sales because people had been waiting for Lion, and fewer iPhone sales because people were waiting for the 4S?

The one thing that makes me uncomfortable is the fact that 45% of their profitability is tied to one line of products, iPhone. That tight product mix enhances profitability, but demonstrates a high reliance on basically one product... it is risky.

Oracle puts all its faith into databases.
Microsoft puts all its faith into office.
Google puts all its faith into a search engine.

You are leaving out of your critique that the amateur analysts have been much closer to the mark in the past. They are the ones who overshot this time.

Your final statement is so obviously untrue I have to wonder why you have made it. Last quarter Apple beat the street by over 20% and the markets threw a party. That's how it works.

His final statement is correct in that Apple did very well, just not as well as was expected by Wall Street.

In his example, Apple could increase revenue's 400%, but if Wall Street had expected them to increase it 500%, it's a disappointment. The share price was based on the expectations (inflated) and thus returns closer to where it should be based on the hard numbers released.

Perception is reality, and even though I'm not a fan of analysts, the fact is that the stock price was based on a combination of their expectations and Apple's guidance (plus other external factors and market conditions). If the analysts had been more conservative, the stock price likely would have been lower to start with.

His final statement is correct in that Apple did very well, just not as well as was expected by Wall Street.

In his example, Apple could increase revenue's 400%, but if Wall Street had expected them to increase it 500%, it's a disappointment. The share price was based on the expectations (inflated) and thus returns closer to where it should be based on the hard numbers released.

Perception is reality, and even though I'm not a fan of analysts, the fact is that the stock price was based on a combination of their expectations and Apple's guidance (plus other external factors and market conditions). If the analysts had been more conservative, the stock price likely would have been lower to start with.

It turns out that Apple beat its guidance by roughly the same amount over every quarter for the past 2 years. The most recent quarter was not an exception. What happened is that the analysts were grossly out of line in their projections based on previous history.

"I'm way over my head when it comes to technical issues like this"Gatorguy 5/31/13